Tuesday, September 2, 2008

When Ann first told me of her idea for a blog celebrating the heroic entrepreneurs of capitalism, I immediately thought of Fred Smith. Most folks who aren't followers of the business world are unaware of Smith, but everyone knows and enjoys the fruits of what he started.

In 1973 Fred Smith's company, Federal Express, introduced overnight parcel delivery to the US. A hub and spoke logistics system, based in Memphis, commenced delivery operations to 25 cities. It took over two years for the company to start making money and it's a wonder Federal Express succeeded. 1973 saw the Arab oil embargo, long-standing and burdensome regulations in the airline and trucking industries, and Postal Service monopolies on mail boxes and letter deliveries. But good ideas die hard, and with over $80 million in venture capital and $4 million of Smith's inheritance from his father, Federal Express outlasted most of these challenges and inspired the rest of the delivery world to follow its lead.

And how different the world is today. What Fred Smith and Federal Express (now FedEx) unleashed was a logistics revolution, the results of which are ubiquitous in modern life. Anything from textbooks to electronics are available from hundreds of countries around the world, affordable to anyone who "absolutely, positively needs it overnight."

Fred Smith is doubly heroic because his position as a successful innovator gave him and his company clout to push for airline deregulation in 1978. On top of this acute achievement, Smith is an ardent free-trader and proponent of policies which make hospitable the environment for future entrepreneurs.